Fujikura Dia Cable’s Building Wire Shipment Downs by 13% in 1Q

Building wire and cable sales decreased by 13% year-on-year basis in volume of copper for April-June 2010 at Fujikura Dia Cable (FDC), a sales joint venture of building wires and cables between Fujikura and Mitsubishi Cable Industries. The firm estimates the annual sales volume would shrink by 9% for fiscal 2010 ending in March 2011 from fiscal 2009 and the quarterly sales represented almost as much as originally planned. Domestic demand for building wires and cables seems not to have hit bottom yet with few construction activities. Price competition becomes severer with decreasing demand. Then FDC posted even larger losses for April-June compared with the second half of fiscal 2009. The firm continues cost cut efforts to improve profitability.

FDC is estimated to hold the secondly largest sales share in Japanese building wire and cable market. Mr. Koji Nashiro, president of FDC, described the firm’s order backlogs have decreased for long-term and large-size construction projects and the new order receipt number is also decreasing. As to small-lot sales for cable wholesalers, the demand is impacted by fewer housing starts in Japan mainly for condominiums.

FDC posted annual loss for fiscal 2008 and 2009. The firm closed a sales branch in Morioka City, Iwate in March 2010 and decreased the employee number to approximately 150 from 180 of 2 years ago in order to reduce operating costs. Mr. Nashiro said the additional optimization might be needed if the current sales condition continues though the firm has no concrete restructuring plan at present.

FDC posted annual net sales at 51.4 billion yen in fiscal 2009. The cable shipment decreased by 18% year-on-year basis in volume of copper. Building wire and cable shipment by Japanese major electric cable makers is forecasted to decrease by 1.8% to 269,000 tonnes of copper in fiscal 2010 from fiscal 2009, according to Japan Electric Wire & Cable Makers’ Association.